As Fernanda Castro waits in line to pay for a new blender at a store in a Sao Paulo shantytown, the hairdresser recounts horror stories of friends who fell into debt and struggled to get out.

“I don’t want that to happen to me,” she said. “I avoid using the credit card now. I’m afraid of it.”

After a spending spree in recent years, Brazilian consumers are acquiring more conservative habits. But in a hopeful sign for the economy, they are still pressing ahead with big-ticket purchases of TVs and living room sets by relying on a tactic that is still new to many – saving.

By early November, the retailers along bustling Doze Outubro street were in full holiday mode. Balloons and streamers bedecked a newly opened branch of the Magazine Luiza department store, a deep-voiced salesman boomed offers of easy credit through a sidewalk sound system, and store banners summed up the mood of a consumption-crazy nation:

“Come, and be happy.”

For more than a decade, a credit-driven consumption boom has helped fuel economic growth here, expanding the country’s middle class and adding to the success Brazil had already enjoyed through its commodity and agricultural sales. Now, there are signs that that model is fraying, and with it the optimism that the world’s main emerging markets would become permanent props for global economic growth.

While many have claimed there is a credit bubble in Brazil, evidence actually suggests that irrational exuberance has come to define labor markets in the South American member of the BRIC countries. Analysts at Nomura have identified trends showing falling unemployment and rising wages while productivity falls and output lags, suggesting a correction could be looming.

Brazil has been called a growth miracle, and the nation has definitely pulled off some stellar growth given its size and the global macroeconomic environment. But it is one of the most notable cases of overheating, with creeping inflation, a quickly appreciating currency, and a bubble-like behavior in its labor markets.

A job market bubble, as defined by Nomura’s Tony Volpon, would occur when companies hire more labor at a marginal cost that is greater than actual marginal revenue growth. In the case of Brazil, firms appear to be confusing rising demand with rising inflation and, in the face of a record low unemployment rate, and a limited amount of qualified labor, hoard and overpay workers despite falling output.